The Build Back Better Act, while still not a done deal, now has a path toward passage in the House of Representatives, with a vote expected mid-November. The political wrangling to reach this moment has been tortuous. But the promise of the pending bill that could transform millions of lives—with meaningful investments in child care, long-term care, and universal pre-K, among others—is critical for a thriving modern economy that will boost productivity and deliver relief to strained family budgets.

Here, we update a previous analysis to reflect the latest state of the legislation and assess its potential impact on U.S. labor markets. Overall, we estimate that the Build Back Better Act (BBBA) will provide support for 2.3 million jobs per year in its first five years, shown in detail in Table 1, below. Add to this an estimated 772,000 jobs per year supported by the bipartisan infrastructure deal, also referred to as the Infrastructure Investment and Jobs Act, passed last Friday in the House, and you get more than 3 million jobs supported per year.

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Below, EPI director of research Josh Bivens offers his insights on today’s release of the Consumer Price Index (CPI) for October, which showed a 6.2% rise compared with a year ago. As Bivens explains, the inflation spike we’ve seen in 2021 is not driven by macroeconomic overheating. Instead, this spike is largely driven by COVID-related factors: a reallocation of spending away from face-to-face services and toward goods combined with supply-chain bottlenecks. Read the full Twitter thread. 

Core inflation up less, at 4.6% y-o-y, but, still a large number. And yet the main determinants of this rise still look to me to not include macroeconomic overheating. 2

— Josh Bivens (@joshbivens_DC) November 10, 2021

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Below, EPI economists offer their initial insights on the October jobs report released this morning. After disappointing job growth numbers in August and September, a solid 531,000 jobs were added in October.

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Over the last couple of months, the resurgence of the Delta variant has made it abundantly clear that the ebbs and flows of the pandemic continue to exert powerful effects on the labor market. After increasing, on average, over 1 million jobs in June and July, job growth slowed to less than 300,000, on average, for August and September. While COVID-19 caseloads have slowed between September and October, they continue to be higher than experienced in June and July, suggesting that we will see a mild improvement—not a huge windfall—when the latest employment data are released on Friday.

For the reference week of the October jobs data, average daily COVID-19 caseloads stood at 78,987. This is a significant (43.5%) improvement over the average daily COVID-19 caseloads during the September reference week: 139,920. All else equal, this should translate into economic growth, as workers begin to feel it is safer to resume in-person job search and employment and consumers become more willing to purchase in-person services. The decline in October COVID-19 caseloads, however, does not mean we are back to the levels earlier in the summer. October’s levels were over twice as high as the average daily caseloads during the reference week in July (33,711 cases).

Similarly, OpenTable shows mild improvement in restaurant customers between September’s and October’s reference weeks. While seated diners in September were down 12.6% compared with the same week in 2019, the number of diners was down 8.4% in October. Although the 8.4% drop in seating relative to the pre-pandemic period is less than what we saw in September, it is still not as promising as the smaller 5.7% drop in July’s reference week compared to July 2019. This likely means the October labor market did not see the kind of growth we experienced in June or July, but some improvement from the disappointing September level is likely.

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In previous work, Adam Hersh highlighted how the Infrastructure Investment and Jobs Act (IIJA) and the Build Back Better Act (BBBA) could provide a backstop against the possibility that economic growth slows due to slack in aggregate demand for goods and services in the next couple of years. Over the past few months, a pronounced uptick in inflation convinced far too many that the U.S. economy actually faced the opposite problem of macroeconomic overheating—an excess of aggregate demand.

But late last week, the Bureau of Economic Analysis (BEA) released data making it clear that the U.S. economy is not overheating and that aggregate demand support in 2022 and 2023 could be vital to continued economic growth. Given this, the macroeconomic boost provided by the BBBA in coming years could be valuable indeed.

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This week, researchers at the Federal Reserve Bank of Minneapolis released two analyses of the economic impact of several recent increases in the separate citywide minimum wages in Minneapolis and Saint Paul. The authors of the two separate, but linked, analyses interpret their findings as suggesting that the series of minimum wage increases reduced employment in the Twin Cities, but this conclusion is not supported even by the results presented in their own reports. 

The data and methodology used in the study are simply not sufficient to distinguish between the effects of the minimum wage increases and other changes in employment happening around the same time. Even more problematic are the studies’ unsuccessful attempts to estimate effects through 2020, when the study’s methodology is unable to separate the effects of the minimum wage from the devastating impact of the pandemic on the two cities’ service-sector workforces. In fact, the studies’ findings implausibly suggest that the entire decline in restaurant employment during the pandemic is due to the minimum wage increases, as opposed to lockdowns, curfews, and pandemic-related declines in consumer spending on eating out.

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October 21 is Latina Equal Pay Day. Last year, a typical Latina worker who worked full-time, year-round earned only 57 cents for every dollar earned by white, non-Hispanic men. This means that Latinas on average must work nearly 22 months to earn what white, non-Hispanic men earn in 12 months.

The infographics below take a closer look at average hourly wages of Latinas and non-Hispanic white men employed in major occupations at the center of national efforts to address COVID-19, based on our previous analysis of Current Population Survey data from 2014-2019. These occupations include front-line workers in health care and essential businesses like grocery stores, those who have borne the brunt of job losses in the restaurant industry, and teachers and child care workers. We found that Latina workers make between 6% to 32% less than non-Hispanic white men in these occupations.

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